Target: Assembly and logistics division from Decrane Aerospace Inc.
Sponsor: Generation Growth Capital
Seller: Decrane Aerospace Inc.
Legal Adviser: Sponsor: Liebmann Conway Olejniczak & Jerry S.C.; Seller: Davis & Kuelthau
Generation Growth Capital recently closed the latest deal in its ongoing effort to carve out a small-market niche for itself in Wisconsin. The Milwaukee-based shop finalized its acquisition of the assembly and logistics division from Decrane Aerospace Inc. on July 1.
The division, which Generation Growth executives renamed Quality Assembly & Logistics LLC, makes electro-mechanical components used in medical imaging equipment as well as in fire suppression devices used by firefighters. Firm executives plan to expand the company’s customer base, push the company into new industries—such as industrial truck manufacturing—and enhance its maintenance and repair services, John Reinke, a director at Generation Growth, told Buyouts.
Terms of the deal were not released. Generation Growth typically targets companies that generate between $10 million and $50 million in annual sales. Generation Growth was able to finance 50 percent of its acquisition of Quality Assembly & Logistics with a senior package from Stephenson National Bank & Trust, a Marinette, Wis.-based community bank that was founded in 1874. While many larger banks are struggling with portfolio problems, Reinke said it’s been business as usual at smaller regional banks.
For Generation Growth, Quality Assembly & Logistics is the third deal the firm has closed since it wrapped up its $30 million fund, Generation Growth Capital Fund I, in 2007. That fund is now about one-third invested, Reinke said. In December 2007, the firm bought Choice Construction Inc., a Menomonee Falls, Wisc.-based company that performs steel installation for the construction of buildings in the Chicago area, and in December 2008 the firm bought Martell Construction Inc., a Green Bay-based concrete construction company.
Reinke, a former executive with Facilitator Capital Fund, another Milwaukee-based private equity group, launched Generation Growth with Cory Nettles, the former secretary of the Wisconsin Department of Commerce secretary, in March 2007. Reinke cites three primary reasons for founding the firm: demand for capital from small, established Wisconsin businesses; lack of private equity competition; and demographic trends in which aging business owners, with no family members able to continue the business, have a lack of options to cash out. “We can go in and bring some more professional resources and help run these businesses,” Reinke told Buyouts.